China’s military and gov’t acquire Nvidia chips despite US ban

BEIJING — Chinese military bodies, state-run artificial intelligence (AI) research institutes and universities have over the past year purchased small batches of Nvidia semiconductors banned by the US from export to China, a Reuters review of tender documents show.

The sales by largely unknown Chinese suppliers highlight the difficulties Washington faces, despite its bans, in completely cutting off China’s access to advanced US chips that could fuel breakthroughs in AI and sophisticated computers for its military.

Buying or selling high-end US chips is not illegal in China and the publicly available tender documents show dozens of Chinese entities have bought and taken receipt of Nvidia semiconductors since restrictions were imposed.

These include its A100 and the more powerful H100 chip — whose exports to China and Hong Kong were banned in September 2022 — as well as the slower A800 and H800 chips Nvidia then developed for the Chinese market but which were also banned last October.

The graphic processing units — a type of chip — that are built by Nvidia are widely seen as far superior to rival products for AI work as they can more efficiently process huge amounts of data needed for machine learning tasks.

The continued demand for and access to banned Nvidia chips also underlines the lack of good alternatives for Chinese firms despite the nascent development of rival products from Huawei and others. Prior to the bans, Nvidia commanded a 90% share of China’s AI chip market.

Purchasers included elite universities as well as two entities subject to US export restrictions — the Harbin Institute of Technology and the University of Electronic Science and Technology of China, which have been accused of involvement in military matters or being affiliated to a military body contrary to US national interest. —